Pennsylvania Legislature has passed online casino, poker and dfs

Pennsylvania Regulators Approve Multiple Skins Per Online Gambling License

One of the more contentious and critical issues surrounding regulated online gambling in Pennsylvania has been resolved.

The Pennsylvania Gaming Control Board (PGCB) announced today that it has approved several new online gambling regulations, including how many independent brands (commonly referred to as skins) can operate under each key online gambling license in the commonwealth’s regulated iGaming market.

According to the temporary regulations, licensees may operate multiple skins, as long as they clearly show a relationship with a land-based casino and run it through a casino’s domain. How exactly the latter part would function in practice is not clear.

You can read the regulations here. Here’s Executive Director Kevin O’Toole in a press release from the PGCB:

“What the Pennsylvania Gaming Control Board did at its public meeting of April 4, 2018 was to approve temporary regulations that enable a very open and competitive market for internet gaming while at the same time assuring transparency and accountability for the consumers.  Under these temporary regulations there is no limitation on the number of skins that a slot machine licensee may employ to deliver games, but every “skin” that a casino offers must be branded in a manner that makes it clear that it is offered on behalf of the slot machine licensee consistent with language of the act.”

Counsel for the PGCB at a meeting on Wednesday briefly described the regulations for “skins” in broad terms, saying they dealt with the “appearance and content” of skins and how they can win approval in the state.

State regulators expect to begin taking applications from both platform providers and casinos with the next month.

How the issue got to here

The decision about skins fell to the PGCB because lawmakers failed to address it in the legislation that authorized online gambling.

While the enabling bill referenced the concept of skins, it was silent on the concept of how many — if any — skins could exist under each operator license.

Following the passage of the bill, it became clear that the question of skins was a pressing one for several stakeholders, and that the state’s land-based casinos were split on the question.

With no guidance from the legislation and pressure from stakeholders for clarity, the decision on skins became difficult for regulators to sidestep.

What’s in the regulations?

The newest regulations deal with several issues, but the most interesting part is about skins. Here’s the summary:

Chapter 818 provides clarification that the Board may authorize interactive gaming certificateholders or interactive gaming operator licensees operating an interactive gaming system on behalf of an interactive gaming certificateholder to deploy interactive gaming skins or interactive gaming websites, that clearly identify the interactive gaming certificateholder or an entity within the interactive gaming certificateholder’s organizational structure, on the display screen visible to players.

The last part deals with how skins must function in the state. It appears that to run an online poker or casino skin, that it must prominently display the casino under whose license the skin is running. So, for instance, if a skin is running under Parx Casino‘s license, the skin would have to somehow make that visibly known.

Must be through a casino website?

The regulations go into more detail on this point. To operate a skin, operators will have to somehow be functionally tied to a casino web domain or some entity owned by the casino:

Interactive gaming operator licensees are not permitted to offer interactive games in this Commonwealth independent from an interactive gaming certificate holder and the interactive gaming certificate holder’s webpage or the webpage of an entity within the interactive gaming certificate holder’s organizational structure.

And:

Interactive gaming certificate holders and interactive gaming operator licensees acting on behalf of an interactive gaming certificate holder may only offer interactive gaming in this Commonwealth through the interactive gaming certificate holder’s webpage or the webpage of an entity within the interactive gaming certificate holder’s organizational structure.

‘Multiple’

The regulations say that casinos and platform providers can have as many relationships they want, and that’s a two-way street:

(g) Nothing in this section is intended to prohibit interactive gaming certificate holders from entering into interactive gaming operation agreements with multiple licensed interactive gaming operators to offer interactive games the Board has authorized the interactive gaming certificate holder to conduct.

(h) Nothing in this section is intended to prohibit interactive gaming operator licensees from entering into interactive gaming operation agreements with multiple interactive gaming certificate holders to offer interactive games the Board has authorized the interactive gaming certificate holder to conduct.

New Jersey’s experience has been positive

In New Jersey’s regulated online casino market, key license holders can operate multiple individual brands or sublease their license to partner brands.

For example, Borgata’s online gambling license is home to five distinct brands:

All told, there are nearly 20 unique online casino and poker brands operating in New Jersey.

As Steve Ruddock recently argued on Online Poker Report, New Jersey’s positive experience with the multiple skins model provides a powerful argument for Pennsylvania adopting a similar formula.

Partnerships and licenses will now come into focus

The open question of how many skins would be allowed per licenses was one of a few factors clouding the landscape in Pennsylvania.

With the issue resolved, we expect that we’ll see a string of announcements on two fronts:

  1. Land-based licenses who haven’t announced if they intend to pursue an online gambling license are likely to clarify their intentions.
  2. Land-based licenses, potential brand partners, and platform providers will start rolling out operational agreements.

The upshot will be a far clearer view on the currently murky partnership picture in PA’s online gambling market.

 

Dustin Gouker

About

Dustin Gouker has been a journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.